Southwest, LAX plan $400 million renovation

Southwest Airlines and Los Angeles International Airport will fund about $400 million in Terminal 1 improvements under a plan approved Monday by the Board of Airport Commissioners.

According to the terms of the project, which must be approved by the Los Angeles City Council, Southwest will build a new checked baggage security system, improve passenger security checkpoints, refresh passenger waiting areas, refurbish the baggage claim area, construct new passenger boarding bridges and renovate the terminal lobby.

Though Southwest will lead the renovation, Los Angeles World Airports will eventually fund the bulk of the upgrades, either by giving the airline rent credits or by paying it a lump sum, according to a report written for the board by airport staff. About $16 million of the renovations will be considered Southwest proprietary improvements and will be absorbed by the airline, documents show. Some security improvements likely will be eligible for federal grants.

"Obviously, Terminal 1 is pretty dog-eared," said Gina Marie Lindsey, executive director of Los Angeles World Airports. "I want to manage expectations here. While $400 million is a lot of money, it doesn't result in a brand new, sparkling, gleaming, terminal. But it will make some very important functional improvements."

Southwest spokeswoman Michelle Agnew said it is too early for airline officials to discuss improvement plans but confirmed the process has begun.

"It does look to be about a $400 million project to renovate Terminal 1 at LAX," Agnew said. "But the city still needs to approve it. We don't want to jump too far ahead, so for now we don't have anything else to share."

Once the lease is signed, Southwest will drop all outstanding legal claims against Los Angeles World Airports, Lindsey said. One ongoing claim involves a 2007 change in how the airport calculates what it charges Southwest for space. The airline had filed an administrative complaint with the U.S. Department of Transportation.

As long as the renovation goes forward, Southwest's new lease will last until June 30, 2024. In the first year, Southwest will pay about $9.5 million in rent, according to airport documents. The size of future payments will be determined later, documents show.

As part of the project, US Airways will move to Terminal 3, giving Southwest its own building.

Henry Harteveldt, a San Francisco-based travel industry consultant at Hudson Crossing, said travelers should cheer the news. He said that the current Terminal 1, while adequate for most travelers, is a bit outdated compared to many modern airports.

"Passengers now spend more time at the airport because they have to get there early to clear security," he said. "Once they are through security, you want to make sure it's a pleasant and productive environment for travel. You have to have gate areas with work space and the right mix of food and beverage outlets."